Wall Street, Banks Press to Shape Dodd-Frank Rules

By

Victoria McGrane

Updated April 22, 2011 12:01 a.m. ET

Wall Street and the financial industry spent more to lobby Washington in the first quarter of this year than a year ago when Congress was writing sweeping financial-overhaul legislation, according to a Wall Street Journal review of lobbying reports released Thursday.

The law, known as Dodd-Frank, was adopted nine months ago but banks, credit unions, investment firms and their trade groups now are trying to shape how it is put into practice. The documents show financial-industry lobbyists are spending time with regulators, who are writing hundreds of rules to carry out the law, while pushing Congress to roll-back certain provisions, especially new limits on debit-card fees.

The industry is working to influence a long list of Dodd-Frank rules, including sweeping ones for the nearly $583 trillion derivatives market and restrictions on the size and activities of the largest banks. Many are also weighing in on mortgage-finance issues as policy makers address problems with foreclosures and how to revamp mortgage-lending giants Fannie Mae and Freddie Mac, which now are under federal control.

The disclosures show that 26 of the financial firms and trade associations that spent the most in 2010 collectively spent $27 million in the three months ending March 31, a 2.7% increase from the $26.3 million spent in the comparable period in 2010.

The industry's first-quarter lobbying tally is its second-highest ever, according to an analysis of data provided by the Center for Responsive Politics. The 26 entities spent slightly more —$27.3 million—between April and June last year, when Dodd-Frank activity on Capitol Hill was most intense.

Wells Fargo & Co.WFC-0.48% shelled out more on lobbying than any other financial firm, surpassing J.P. Morgan Chase,JPM-0.74% which had the top spot in 2010. Wells Fargo's lobbying expenditures nearly doubled to $1.9 million during the first quarter from $1 million in the same period a year ago. A Wells Fargo spokeswoman declined to comment.

Disclosure documents show the financial industry turned its attention to regulators and executive-branch agencies in charge of implementing Dodd-Frank, and reflect the dozens of meetings the industry has held with officials at the Federal Reserve, the Treasury Department, the Securities and Exchange Commission, the Commodity Futures Trading Commission and others.

"There's been a tremendous amount of regulatory activity," said Floyd Stoner, chief lobbyist for the American Bankers Association. Mr. Stoner estimated Dodd-Frank would generate at least 5,000 pages of regulations, and said the trade group must ensure the new rules work for its members and the economy.

"Implementation, implementation, implementation," said Scott Talbott, top lobbyist for the Financial Services Roundtable, explaining the spending. The Roundtable, which spent about $2.5 million in the quarter, represents 100 of the largest U.S. financial firms.

Still, many institutions remain focused on Congress. Disclosures for lobbyists working for the Community Financial Services Association, which represents the payday-lending industry, show the it has only lobbied Congress. A spokeswoman for the group declined to comment.

According to disclosures, the trade group spent $590,000 during the first quarter, primarily on Dodd-Frank and the fledgling Consumer Financial Protection Bureau. The law set up the CFPB and gave it broad powers to regulate large payday lenders. Republicans have introduced several bills to weaken the bureau's powers.

John Magill, chief lobbyist for the Credit Union National Association, said its top priority has been building support for legislation to delay the debit-card rule. The group reported $756,000 of lobbying outlays for the first quarter, up 12% from the year-ago period. Mr. Magill said that figure doesn't reflect the group's grassroots lobbying, which has been "extremely busy." The group estimates that along with its state associations it has generated 144,000 contacts to lawmakers in the first three months of 2011 in support of legislation delaying the debit-fee rule.

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